Are you ready for taxes in 2022? When is the last day to file taxes? Its time to mark your calendars for the federal tax filing deadline.
According to the IRS, for most taxpayers, Monday, April 18th 2022 is the deadline for filing 2021 tax returns. It is normally April 15th, but due to the Emancipation Day holiday observed in the District of Columbia, it’s later this year. For those who reside in Maine or Massachusetts, due to the Patriots Day holiday, they have until April 19, 2022 to file their returns.
If you request an extension, you have until Monday October 17th 2022 to file.
Planning for the nation’s filing season is a huge undertaking and IRS teams have been working to prepare. The pandemic continues, creating challenges. However, they remind taxpayers that there are important steps they could take to ensure that their refund and tax returns don’t get delayed.
According to IRS officials, to avoid delays and snags, it’s important that the numbers on the return are correct and filled out completely.
Also, filing electronically with direct deposit is the best way to avoid delays.
Needs and wants, what is the difference? Understanding the difference, between needs and wants, is crucial to good financial decision making.
What is a Need?
A need is a requirement, or essential item that is considered to be necessary for living. Examples include shelter, food and water, and clothing. These are essential for a person’s health and safety. If needs are not met in a timely manner, they can lead to illness and inability to function properly. Needs are essential for survival.
While the three most basic needs are food, shelter, and clothing, in modern society, education and healthcare have also become important. All these things are essential for everyone.
What is a Want?
Something you desire, but don’t need is a want. It typically improves your quality of life. You can think of a vacation, jewelry, entertainment, and maybe that new designer handbag. A person’s wants are anything you would like to have, now or later. Individual wants can vary and may change from time to time. Our desires can be infinite, and unfortunately there are only limited means, so we need to find alternatives.
How do you Understand the Difference between Needs and Wants?
Certain needs are easy to identify. These are essential elements that you must have to survive. You might then say that everything else is a want, and not a need. But it is not that simple. For example, some people view owning a car as a necessity. Others consider it a luxury, since they could walk, ride a bike, or take public transportation. It really depends upon you own particular situation.
Other purchases can technically be classified as a need, even though if they really are more of a want. For example, what about clothes and shoes? You can spend a lot on expensive new name brand sneakers or save money and get the generic ones? Shoes are a need, but how about the name brand ones? It all comes down to your perspective and how you manage your money.
Although most people would not consider it a need, is it a need or a want to own that designer handbag? What if you need a handbag for your daily use? Should a regular handbag be considered a need and an expensive designer one considered a want?
How do you Decide your Needs and Wants?
To help, write down everything on paper and figure out how to split your income or prioritize your expenses. What you need to do is list your needs and wants, and set a priority for each item. This will allow you to clearly see where your expenses are, and will help you to categorize your priorities. First, list your needs in one column, and your wants in the other. Then, put the highest priority items at the top, and the low priority items at the bottom, separately, for both needs and wants. That will help you make your budgeting decisions.
You’ll soon realize that you can fulfill more of your wishes over time if you are able to distinguish between, and prioritize your needs and wants. It really is a balance. Once you have clarity about your needs and wants, you can plan your budget to help you make spending decisions, to realize your financial goals. Financial decisions will be influenced by what someone defines as a need or want. For example, a person who considers a new designer handbag a necessity will spend more than someone who uses a more basic one.
Needs and wants can be distinguished according to their importance. The above discussion on economics revealed that wants and needs are distinct forces that require actions to satisfy them. The distinction is made between what is needed and what is desirable. Take a look at your own needs and wants so you can help realize your own personal financial goals.
Owning stocks allows you to be an investor in a public company. Stocks are simply a share of the company’s ownership.
It doesn’t matter if you call it stocks, shares, or equity, it all refers to the same thing. A stock is a claim on the earnings and assets of a company. You are one among many owners, also known as shareholders. This gives you a claim, though usually very small, to all the company’s assets. As an owner, you are entitled to a share of the earnings and any voting rights that come with the stock. Your ownership stake in the company grows, as you acquire more stock.
To raise funds, companies sell shares in their businesses. Stock shares are a way for companies to raise capital to finance their operations. The money is then used for different purposes. A corporation, needs money to pay expenses, like expanding into new markets, launching new products, paying off debt, and hiring new people. To raise capital, they issue stock shares.
Stocks are primarily bought and sold on stock exchanges. The initial public offering, or IPO, is the first time that a company issues stock to the public. Stockholders have the right to resell their shares at the stock exchange, where prices are determined by supply and demand.
Stock units are known as shares. For example, if a company has 10,000 shares and you purchase 100, you will own 1% of the company’s shares, and claim on the company’s earnings and assets.
Stock certificates are the representation of a stock. This piece of paper is proof that you own the stock. Nowadays, you rarely see physical certificates of shares as brokers store documents electronically. This is also called holding shares in street name. This allows shares to be traded more easily.
How do stocks work?
You can get certain benefits when you purchase shares of stock in a company, depending on which type of shares you have.
Capital Appreciation. The first benefit is the potential for capital appreciation. Capital appreciation means an increase in the value of your stock. If the stock price rises, your shares will increase in value. Shareholders can make a profit by selling their shares at a higher price than they were bought. However, if the stock price falls, your shares will fall in value. If a company fails to perform well and shares drop in value, it is possible to lose some, or all, of your investment.
Dividends. Another benefit is dividends. You could be eligible to receive a portion of the company’s profit with dividends. These are regular payouts of a percentage of profits to shareholders. Dividends may not be paid by all companies, such as young, expanding companies. Instead, they reinvest all their profits in the hope of growing further and generating greater profits.
Voting Rights. Next is voting rights. At the annual shareholder meetings, you may be eligible to vote. Stocks give you an ownership stake in a company but it doesn’t necessarily mean that you have the right to participate in its day-to-day operations. You can vote once per share to elect the directors at the annual meetings.
While management is expected to increase the value for the shareholders, If that doesn’t happen, shareholders have the option to vote to remove the management. Also, you can sell your stock if you are not satisfied with the company’s management or performance and find a new place to invest your money.
Limited Liability. Stocks also have limited liability. This means that you, the stock owner, are not personally responsible if the company fails to pay its debts. Stock ownership means that you cannot lose more than the amount of your investment, regardless of what happens. You can’t lose your personal assets even if a company in which you are a shareholder goes bankrupt.
Why do people purchase stocks?
Stocks offer the possibility to grow your money but remember there are also significant risks.
Investors use them to help grow their savings and for planning for long-term financial goals such as retirement and education. Your savings balance will increase as stock prices rise or as you gain from dividends. Though, stock prices can also fall, sometimes losing all their value or becoming worthless.
Many use stocks as a way to help diversify their investment portfolio. To help reduce risk, investors buy stocks from companies large and small across a variety of industries and geographies. Diversifying your stock portfolio can allow you to benefit from growth in certain sectors and offset losses in others. Also, many investors don’t buy individual stocks, but instead invest in funds that do the individual stock investing for them such as mutual funds or ETFs, or use a financial advisor to help them.
Stocks, are an important part of many peoples long-term investment strategy. You can become comfortable enough to start investing money in the future by taking a little time to understand stocks basics, and learn more about investing.
Information is for educational and informational purposes only and is not be interpreted as financial advice. This does not represent a recommendation to buy, sell, or hold any security. Please consult your financial advisor.
What is Insurance? Do I need it? What are the costs and benefits? These are all common questions and there are easy to understand answers.
Insurance can seem complicated and confusing because you are paying for something that you don’t intend to use. Nobody wants to have something terrible happen to them. However, a loss without insurance can lead to financial difficulties. Insurance is coverage by contract that offers financial protection in case of an unforeseeable tragedy. Let’s help you get started understanding more about insurance.
Do you need insurance?
Insurance can help you manage your risk. Insurance provides protection against financial loss. If something happens to you, the insurance company will pay you or someone else that you are responsible for. Otherwise, you may be responsible for any costs incurred if you don’t have insurance. It can make a huge difference in your life to have the right insurance that covers the risks you face.
An insurance policy is a contract between the policyholder, the individual or company who gets the policy, as well as the insurer, the insurance company. This protection is provided by the insurance company because it pools risk from many individuals and entities that have similar needs.
Insurance generally protects you against losses that you cannot otherwise pay for. You may be 100% responsible for any costs or expenses incurred by an accident if you don’t have insurance. An insurance policy provides protection for an individual or company against financial loss. The insurance company will reimburse your losses if you lose in a covered event.
What are the most common types of insurance?
There are many types of insurance. Here are some of the most common.
Health Insurance. This insurance helps you pay for doctor visits and prescription drugs. Your health insurer and you agree to share a portion of your medical expenses once you have purchased health insurance coverage. This is usually a percentage or a dollar amount and is usually done after your deductible has been met. Once you have paid the deductible, your insurer will pay the remainder of your covered expenses for the rest of the calendar year.
Auto Insurance. Covers you against the cost of vehicle repairs and any medical expenses that result from a collision. Auto insurance is required in most states to operate a motor vehicle. Auto insurance can help you and get your car repaired in the event of an accident. It covers liability, as well as medical payments and collisions. You are responsible for paying your deductible every time you file a claim, just like homeowners insurance.
Life insurance. Pays a specified amount to a person that you choose if and when you die. Life insurance promises that your survivors, the beneficiaries of your life insurance policy, will receive a lump sum. Your family can use the money from your life insurance policy to pay for living expenses and to help with bills.
Renter’s and Homeowner’s Insurance. Covers your personal and financial property from damage and loss. It also covers you for injuries that may occur on your property. Most lenders require that you have homeowner’s coverage if you have a mortgage on your home. Also, many landlords require that you have renter’s insurance to protect the property.
How does an insurance policy work?
Insurance policies can be in place for a certain period of time, which is known as the policy term. You will need to renew or purchase a new policy at the end of the term.
A premium is a fee that you pay when you purchase an insurance policy. Premiums for some insurance policies are paid monthly, such as for health insurance. Others, like homeowner’s or auto insurance, may be paid only once or twice per year. Your risk to the insurance company will determine how high your premium.
Let’s suppose you have just purchased a car and are looking for insurance. The insurance company and you would sign a contract in which they agree to cover your car against certain kinds of damage. Three months later, your car is damaged in an accident. In general, your insurer will help repair any damage that is covered by your car insurance policy if your policy covers the damage to your car.
Most insurance policies also include a deductible. This is the amount that you must pay first before your insurance company will pay their share. If you have a $500 auto policy deductible and have damages of $2,000, you will be responsible for $500, and your insurance company for $1,500. Some policies allow you to choose your deductible. A higher deductible usually means a lower premium. It is important that you carefully read the policy before you purchase it. This will ensure you know what you are covered for.
Insurance is a valuable financial tool. Insurance can help you to live your life without worrying about sudden financial issues. It could also mean that you have more money to pay for repairs and a replacement vehicle in the event of an accident. After an accident, insurance can help you keep your life on track.
Here we will learn how to read a pay stub, and take a look at a sample pay stub.
As a financial record of their payment, employees receive a pay stub. Although the pay stub may seem confusing, it doesn’t have to be. This brief summary should help you understand it better.
The pay stub may also be referred to as an earnings statement, wage statement, pay slip, payslip, salary slip, or paycheck stub. They are all terms that refer to the same thing. Pay stubs show details about your salary for each pay period.
Although the information on a pay stub can vary, it usually includes employee and company information, the wages earned for the current pay period as well as the year to date. A section is often dedicated to tax breakdown which shows how much an employee pays for state and federal taxes. A section also shows benefits deductions. The most important thing is that the pay stub shows how much you earn.
If you are employed, you may have received a paycheck with a paystub attached. Congratulations, you got paid! If you receive a physical paycheck, the pay stub is usually attached to the check. If not, you may be able to access your pay stub information online if direct deposit is used by your company. Lets take a closer look at the information you need to know on your pay stub.
Pay Stub Information
The first thing to note, is company and employee information. This section includes your company’s information, also your name, employee number, and related information.
Pay period. Pay period refers to the time you have worked. A biweekly pay schedule, for example, calculates a two-week pay period.
Pay Date. Pay date is the date you receive a paycheck. Many companies pay their employees on a regular basis, such as every other Friday. This would make Friday the expected pay date.
Gross Income. This section of your pay stub shows your gross income, which is also called wages or earnings, and is a calculation of your hourly rate and your hours worked, if you are an hourly employee. The total is your gross earnings, which is the amount you would make before taxes and deductions.
Deductions. This section contains the taxes taken from your gross earnings. The employer sends this money on behalf of the employee to the government. Federal income tax, Medicare and social security are the three main types of federal taxes withheld from your pay. Many states also withhold their taxes.
You may also have other employee deductions. This sample pay stub, does not contain any employee deductions, though you may have some. Employees have the option to withhold contributions for retirement funds, health savings accounts, and other benefits. Pretax deductions, from gross income, have the advantage that they are not included in tax calculations.
Summary section. Here Current Total is Gross Income (or gross earnings). This number is the same gross income as we saw earlier. This is the amount you earned during this pay period, before taxes and deductions.
Current Deductions. This is the total of your deductions, including taxes and other deductions.
Net Income: This is often called your net earnings, or take-home pay. This is what you should be looking for immediately. It’s the actual earnings that you will receive this pay period after subtracting all taxes, contributions, and so forth. You will also find a year to date summary of these amounts, including year to date gross income, deductions, and net income.
Employees need to be able to read and understand each section of a pay slip to ensure they are getting the correct amount. If there are any concerns regarding an employee’s salary, they can use pay stubs to help resolve them. It is important to know how to read a pay stub. Pay stubs give you a breakdown of gross and net pay as well as all deductions. You can reduce errors by checking it frequently and reporting any mistakes to your employer.
It may be referred to as paycheck, payroll check, paycheque, cheque, pay, salary, or payroll. In summary, it is a check issued in payment of wages.
What is a paycheck?
A paycheck is a payment made to an employee for the work they have done. To receive the money, the employee cashes or deposits the check. An employee can also choose to have their paycheck automatically deposited into their bank account, so that they receive their money on the day they are paid. Electronic deposits are done mostly now, as the physical paycheck is being replaced more often by electronic direct deposits to an employee’s bank account.
How often do you get a paycheck?
A paycheck is usually issued every two weeks. However, some employers may issue paychecks every week or monthly.
What is included with a paycheck?
A pay stub is often attached to a paycheck. Also known as a payslip, earnings statement, paystub, or paycheck stub, it is typically attached to a paycheck. This is the section of the paycheck that records how much employees were paid. It typically includes the employer name and address, gross wages for the pay period, taxes, and any other deductions that the employer is required to make. It may also include personal deductions, like retirement plan, or pension contributions or insurance. Finally, it will also include your net pay after any of these deductions.
Validate the information.
Be sure to check all the information on your paycheck and paystub. All information about employees must be current, and accurate. Any inconsistencies and incorrect data can cause delays in receiving your paycheck. It can also cause confusion with your taxes, or also delay bank deposits. Let your employer know, if you find anything incorrect.
Its important to understand your paycheck. Be sure to understand all the information, and make sure your money is deposited correctly.
A savings account is an account that allows you to store your money safely and earn interest. Savings accounts are a basic bank account that allows money to be deposited. It allows you to withdraw money when you need to. Savings accounts are offered by many banks, credit unions and other financial institutions.
A savings account is a type of deposit account that you can use to save money and not spend it right away. Savings accounts are geared toward saving, and they allow you to save money for specific goals and purposes. For example, you could open a savings account for your emergency fund or just for general savings.
As an incentive to save money, many savings accounts offer interest. Money deposited earns interest which is then deposited back into your account. Financial institutions use savings and other deposit accounts to fund loans for their customers.
How do you open a savings account?
You can find savings accounts at almost every bank and credit union, including online banks. You can also find savings accounts at brokerage and investment firms.
For those banks and credit unions that offer savings accounts, you can visit a branch or open an account online. It normally will not take very long to open an account. Different institutions may have different requirements, so check first. Your name, address, telephone number, and photo identification will also likely be required. You will also need to provide your Social Security Number.
It is a good idea to compare different accounts for the best rates, requirements, and features. The interest rates on savings accounts can vary by account and institution, so check around for the best rates. Banks and credit unions can change their rates at anytime, so try and understand how they change their rates and if there are any promotions that they may be offering.
For funding the account, some institutions require that you make a minimum deposit when you open an account. Others allow you to fund it later.
What is the cost of savings accounts?
Savings accounts are often free but there are some limitations and potential costs. You’ll likely need to keep a minimum balance in the account. If you don’t maintain the minimum balance, banks may charge a monthly or annual fee. If your account balance falls below zero, additional fees will likely be taken from your account though some banks reduce minimum deposits for students. Make sure you are aware of any of these requirements before opening your account.
Saving accounts are a good idea for many reasons, including the possibility of earning interest. Savings accounts are a safe place to store your money. You can make sure that you have enough money to meet your savings goals by opening a savings account, and then making regular deposits.
Saving is when you are not spending all the money that you have that you have earned. Because you are “saving” it. It’s the process of putting aside money for future uses, and not spending it immediately.
Why should we save money?
You can save money to achieve short-term goals, such as saving to buy new clothes, or a gift, or long-term goals such as buying a car, or house.
Also, saving money can help you cover unexpected expenses such as medical expenses, or pay for repairs for your car. Unexpected events and emergencies are not something that can be predicted. These events can lead to large financial burdens if you don’t have enough savings.
Saving can help a person or family become financially secure. You can also invest your savings and potentially make a profit. This means that you will not only have funds to spend later but also increase the amount of money you have. Saving money is a good habit to develop on a daily basis.
Where can you save?
Where you save depends on how much and the type of saving you are doing. You can keep track of your savings by using different methods or accounts to meet different goals. Some smaller savers keep their money in a can, or piggy bank. These may work well for small amounts of money and short-term savings, but it is not recommended for long-term saving.
You want your money to be safe. For your savings, you should consider deposit accounts, such as savings accounts, checking accounts, certificates of deposit, and money market accounts. It is a good idea to keep your money in a financial institution such as a savings bank, commercial bank, or credit union. These institutions offers financial services, including checking and savings accounts. Money saved at these institutions can be protected against loss, unlike money at home that could be lost or stolen. In addition, you can also potentially earn interest, which is earnings on your savings.
How much money should you save?
One thing you should first think about is setting up an emergency fund. Unexpected financial emergencies are one of the most important things you should save for. You should save between three to six months of living expenses for unexpected financial emergencies to be financially secure.
After you have an emergency fund, you should consider saving a percentage of your income. You may want to set a goal, such as saving 10% or more of your income if you are able to.
How do you start saving?
Money should not be considered as the last thing left after all current wants and needs have been met. This will help people choose to save over spending money. Be sure to have an amount of your income that you want to save each paycheck.
Saving money is a tradeoff for spending in the present to be more financially secure in the future. Savings goals will be easier to achieve if you know what you are willing to give up in order to save money. To reach your financial goals, try to limit your spending, and focus on saving.
A check is a document which is dated, written, and signed, that instructs a bank to pay money from the writer of the check, the payor, to the bearer, or payee, of the check. The check is printed by the drawing bank for the account holder to use. The payor signs the check and then presents it to the payee. They can use it to request cash or deposit money into their account. The amount for which the check was written can be used as a substitute for physical currency.
Do you need to use checks?
Because some transactions still require checks, they may be helpful in some situations. Some landlords will insist that tenants pay rent with a check. Small businesses may not accept debit or credit cards. Also, checks or cash may be a better option than credit cards if you want to be more disciplined about your spending.
You can use checks to pay bills, make gifts, or transfer money between people or entities. Checks are considered safer than cash when transferring large amounts of money. A check that is stolen or lost is not legally able to be cashed by others. The individual or company you are paying is the only one who can cash the check.
For example, if you were going to pay your rent, it is safer writing a check to pay than to withdraw $1000 if you are going to pay cash. Since someone could take the cash if you lose it.
However, checks don’t have these problems. The landlord would rightfully be the only one who could deposit the check or cash it. No one could legally cash or use a $1000 check if you dropped it. Though, you should still be cautious with checks once they have been written, since they are a financial document.
What’s on the check?
Although checks may not look identical, most share the same basic parts. On the top left-hand corner, you will find the name and contact information for the person who wrote the check. Below, you will also find the name of the bank holding the payor’s account on the check.
The payor must fill in a variety of lines:
The check’s top right corner will have the date written.
The check’s first line should include the name of the payee and is indicated with the phrase “Pay to The Order Of”.
In the box beside the name of the payee, is the amount of the check in dollars.
The line below the name of the payee shows the amount in words.
Payor signs the check in the lower right corner. To be valid, the check must be signed.
A memo line is located in the bottom left corner of the check, below the information for the drawing bank. It can be used by the payor to enter any relevant information such as a reference or account number or any other reason for writing the check.
Below the memo line and payor’s signature lines, a series of coded numbers can be found on the bottom edge. These numbers are the routing number of the bank, the check number and the account number of the payor.
Make sure you are familiar with all the information found on a check.
In summary, a check is a more secure way to pay than cash and provides you with a receipt. For many financial transactions, you will need to be able to write and use checks.
Investing refers to the act of purchasing assets, which are also called investments, with the expectation or goal that they will increase their value over time or pay you income. It is a way to potentially increase your money. Investing is the purchase of specific investments. This is often done through an investment account.
You may currently be saving money in a traditional bank savings account or something similar. These bank savings accounts typically have a lower rate of return than the potential returns from investing. This is why many people consider investing for long-term goals, such as buying a house, or retirement.
What types of investments are there?
There are many types of investments. Three main types of investments are: stocks, bonds, and real estate. There are also mutual funds, exchange traded funds, or ETFs, commodities and, more recently, cryptocurrency has been considered an investment. Fine art, antiques, and other collectables are other possible types of investments.
Let’s look more closely at the main types of investments. First, Let’s look at Stocks.
Stocks. You can buy shares of stock to get partial ownership in a company. You can share in the company’s potential gains or losses as an owner or shareholder. Stocks may also pay dividends, which are regular payments. Stocks can be risky as there are no guarantees of returns, and companies could even go out of business.
Bonds. If you invest in bonds you are lending money to a government or company for a set period. You will receive a fixed rate return on your loan as well as the amount you originally paid for the bond. Bonds are also known as fixed income investments , and they are generally less risky than stocks. Some bonds, however, are more risky than others.
Real Estate. Real estate can be a house, a building or piece of land. Real estate investments come with varying risk levels and can be affected by many factors such as the employment rate, school quality, and location.
Mutual Funds and ETFs. You may be interested in mutual funds and ETFs if you are looking to invest in any one of the prior investments but aren’t sure which specific investment to make. ETFs and mutual funds invest in stocks, bonds, and other types. ETFs and mutual funds allow you to invest in many assets simultaneously when you buy their shares.
How does investing work?
Investing is when you purchase an asset at a lower price and then hopefully sell it at higher prices. It’s also called appreciation when an investment increases in value between the time it was purchased and the time it is sold.
For example, a share of stock may appreciate if a company has more sales or increases its profits. A home may appreciate in value because of more jobs and people have more money and are willing to live in the area.
Investing is not only profitable due to appreciation, but also by purchasing and holding assets that produce income. Income investing does not aim to make capital gains by selling assets. Instead, it aims to purchase assets that produce cash flow over time and keep them for as long as possible. A bond, for example, may do this by paying regular interest.
What are the risks of investing?
Investing involves risk. There are many risks associated with investing. You can lose money more likely if you take on more risk. However, your investment returns will potentially grow faster if you take more risk. It is important to decide how much risk you are willing to take when investing. Financial advisors generally recommend that you take on more risk when investing for a distant goal, such as when you are still young and want to save for retirement.
How can I start investing?
It’s easy to get started investing. You don’t even need a lot of money. To invest, you will likely need to open up an investment account.
One type of account is an online brokerage account.You might prefer the convenience of doing your research online and picking your investments by hand. For beginners, you should consider the ease of diversification offered by mutual funds and ETFs.
Another type of account is with a financial advisor. Talk to a financial adviser that is available to help new investors if you prefer getting professional help for investing. A financial advisor can help you by building a trusting relationship with someone who can help you choose and manage your investments.
In summary, investing is a long-term venture, no matter how small or large your investments. You’ll likely reap the greatest rewards if you start early, and continue to invest over time.
